• 3 minutes China's aggression is changing the nature of sovereignty.
  • 8 minutes Will Variants and Ill-Health Continue to Plague Economic Outlooks?
  • 9 minutes US oil facts
  • 31 mins GREEN NEW DEAL = BLIZZARD OF LIES
  • 1 day Europe gas market -how it started how its going
  • 3 hours Amazing!...see article: "Turkmenistan To Close "Gates Of Hell" Gas Fire" by Irina Slav
  • 2 days Russia oil production live month after month starting from November 2021 - official stats from Rosstat agency
  • 2 days Is $100 Crude Bad For US Shale? That's what Oil CEOs Say
  • 19 hours Ukrainian Maidan after 8 years
  • 2 days Nuclear power in Russia
Norway Is Determined To Boost Oil Discoveries

Norway Is Determined To Boost Oil Discoveries

Norway is determined to extract…

Can The World Avoid A Global Oil Supply Crunch?

Can The World Avoid A Global Oil Supply Crunch?

A combination of shrinking spare…

BHP Billiton Sells U.S. Oil Assets To BP

BHP Billiton has concluded the sale of its U.S. shale oil operations to BP and Merit Energy, a local U.S. oil independent, for US$10.8 billion, ABC reports, quoting BHP’s chief executive Andrew Mackenzie as saying the sale aimed to maximize value and boost returns to shareholders.

In fact, the sale was prompted by activist investor Elliott Management, which has been nagging BHP to exit U.S. shale for over a year now. BHP bought the shale assets as part of its takeover of Petrohawk Energy and, separately, from Chesapeake Energy back in 2011, paying north of US$20 billion for them.

The selling price is obviously substantially lower than this, but the time to offload the assets, according to analysts was right, with shale oil production on the rise prompted by higher international prices. The time to buy them, one analyst noted to Reuters, was wrong, on the other hand, with the shale patch booming and asset prices through the roof.

Besides the high price for the assets, BHP has been booking substantial writedowns on these assets over the last few years, thanks to the 2014 sector downturn. This eventually led to Elliott Management losing its patience and insisting that BHP ends its U.S. shale venture. Before the end, however, BHP will this year book another US$2.8 billion (A$3.8 billion) in after-tax impairment on the carrying value of the operations.

Related: Saudi Budget Deficit Shrinks As Oil Prices Rally

BP will buy BHP’s assets in the Eagle Ford, Permian, and Haynesville in two transactions for a combined US$10.5 billion. The rest of the assets, in Fayetteville, will go to Merit Energy.

For BP, the deals are a great opportunity to expand its footprint in the shale patch, even “transformational” as CEO Bob Dudley called the acquisition, which, Reuters notes, is its first after the 1999 acquisition of Atlantic Richfield Co. The BHP assets will boost BP’s U.S. onshore oil and gas resources by as much as 57 percent.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage



Leave a comment

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News